Inflammation in the central nervous system (CNS) initiated by glial cells occurs in many neurological disorders. It has been noticed that inflammation in the CNS occurs relatively slow and is often minimized compared to that in other organs and systems. Although it becomes aware that the presence of blood-brain-barrier cannot explain why inflammation in the CNS is minimized, it is still unclear of how inflammation is modulated by the unique neuronal environment. How inflammation is modulated in the CNS, hence, is a key question for understanding cerebral inflammation. The presence of neurons and their adhesion molecules are hypothesized to be the factors to minimize inflammation in the CNS. Glial cultures were employed and were prepared from postnatal day 1 mice. Neurons were prepared from embryonic day 16 mice and were co-cultured with glia for 6 days. Influences of neurons on glial activity were studied by examining the expression of glial fibrillary acidic protein (GFAP) and pro-enkephalin, markers for astrocytes. Neuron-glia co-cultures markedly reduced the expression of GFAP and pro-enkephalin. Inflammation was stimulated by bacterial endotoxin lipopolysaccharide (LPS). Production of nitrite, a stable metabolite of nitric oxide (NO), was examined. LPS stimulated nitrite production in a dose-dependent manner. The presence of neurons in glial cultures significantly reduced LPS-stimulated nitrite production, and shifted the dose-response curve to the right suggesting a decrease of responsiveness of glia to LPS. Cell-cell contact between glia and neurons via interactions of neural cell adhesion molecule (NCAM) was then hypothesized. Soluble NCAM significantly decreased nitrite production. NCAM is a big molecule with five immunoglobulin (Ig) domains. To examine which domains of NCAM affect LPS-stimulated nitrite production, a monoclonal antibody binding to the third Ig domain (NCAM antibody) that can mimic the signaling of NCAM protein was employed. Another monoclonal antibody binding to second Ig domain was used as control antibody. The presence of NCAM antibody significantly reduced LPS-stimulated nitrite production, whereas the control antibody at the same concentration did not show any effect. A ten-amino acid peptide of the third Ig domain of NCAM also significantly reduced LPS-stimulated nitrite production. Among different types of glial cells, both astrocytes and microglia can be induced to produce NO. Astrocytes are known to express NCAM and interact with neurons. However, expression of NCAM on microglia is unclear. Immunocytochemical analysis of NCAM by using confocal microscopy showed that microglial cells also expressed NCAM. Addition of soluble NCAM in LPS-stimulated microglia-enriched cultures also significantly reduced nitrite production. Our study is for the first time to show that neurons reduce the production of inflammatory factors. Besides, it is for the first time to show that NCAM modulates glial inflammatory responses by reducing nitrite production. The results explain, at least partly, neurons suppress glial inflammatory responses probably by cell-cell interactions via NCAM, and indicate that the third Ig domain is by far the most important domain. Our result is also for the first time to demonstrate NCAM-like immunoreactivity on microglia. This study provides insight for future therapeutic intervention of inflammation occurred in neurological disorders and environmental toxin related neurodegeneration.